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Face It! The PO Ain't Coming Back!

letsgetitdone's picture
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This is a reply I wrote to Bryce Covert, MJ, and Richard Kirsch, formerly of HCAN, at the New Deal 2.0 (ND20) site.

MJ expressed the view that both the private sector and Government are corrupt these days and that neither can be trusted. I agree with MJ about corruption in Government these days, but I think one has to distinguish among the branches of Government when it comes to corruption, and also the kind of corruption involved. The most corrupt branch of Government is Congress, because its members need huge contributions for re-election,and the sources of those funds are now drafting legislation in many cases.

Some executive departments such as The Defense Department appear to be more corrupt than others, because they are subject to influence from powerful defense contractor lobbyists. The electoral system has been corrupted over time to create a bias against the success of third parties. When combined with the development of a Supreme Court that is not defending individual liberty, there a great danger of the development of a plutocracy whose hard shell we won't be able to crack to allow democracy to emerge from below. Perhaps the development of Information technology can provide a way around the institutions by giving people a way to self-organize that gets around the need for large quantities of money.

Some Federal bureaucracies and agencies are more corrupt than others. The SEC seems to have a big problem. The Department of Agriculture always has its problems in its loan and granting agencies. But I think agencies like HHS and census are pretty clean, and that the scientific organizations are also clean, on the inside at least, if not at the top.

So, when it comes to corruption, I think Government is a mixed bag. I also think, it would be relatively easy to clean Government out and make it a responsive instrument again, provided that we can first clean up the mess in Congress, and we can elect an Executive who wants to clean up the Executive Branch of Government and who is willing fight for that. Those are big ifs, of course, but they can become reality if we have a democratic revival that refuses to elect and re-elect bought people. The perspective MJ expresses in relation to both the private and public sectors leaves us no way out.

We have to make a choice for strengthening the public sector now. First, because we need greater Federal Spending to ramp up private sector savings and eventually private sector aggregate demand. We need that demand to end unemployment and to prevent a double-dip recession.

Second, we also need an effective, honest, and large Federal Government because we must have an instrument that can counter the influence of globalizing elites in the economy and the marketplace. These elites have been corrupting our markets and they've corrupted our financial system, which has become little more than an instrument for their looting of national currencies. We have to face the reality that we can't master globalization without a strong and very large Government sector that can counter-balance disruptions coming from the global corporate sector.

I know that right now the Government sector is largely the creature of those globalizing elites. But the cure for that is not to get rid of the Government, or to shrink its role. It's to take it back, and make it work for people by controlling the global corporations, and stopping the looting from the financial system.

In connection with the new hcr legislation, Bryce Covert and Richard Kirsch say that we need a starting place, and that the hcr bill is a success because it provides a Social Security-like starting place that we can improve over time. This view has received a lot of attention from bloggers at FireDogLake and Correntewire, and their conclusion, as well as my own, is that the hcr bill is not like SS, because its structure is more like that of a welfare program, while SS is like a pre-paid insurance program. It is much easier to incrementally extend an insurance program than a welfare program, simply because of the stigma attached to welfare in our society. This was true in Roosevelt's time. And it is still true now.

The bloggers also believe, as I do, that when you're talking about the prospect of improving something that already exists, you need to have the right structure to improve because your starting place affects the direction you can move in. It closes off certain pathways and opens up others. This is a well-known phenomenon in complex adaptive systems theory, and even in some schools of economics.

For example, the present hcr legislation, tends to close off the possibility of any changes or improvements for years, because any attempts at change will be met with "well, let's see how this works. It won't even get tried until 2014." In addition, once the exchange kicks in, its proponents will be very resistant to acting on any evaluation of it before 2017, saying that there hasn't been enough time to see if it will work.

Further, if it's not working, people will then immediately say: "well let's not get rid of the exchange, but let's add a Public Option (PO) to see if that will fix it." Then there'll be a fight over the size of the PO, and some compromise will be worked out so that only a small part of the population, those most in need, are eligible. Because only a small part of the population is eligible, the PO won't have the advantages of scale, so its performance will be inferior and the prices it can offer will be within 10% of private insurance. But, of course, we'll have to wait three more years to see if that will work, so that will bring us to 2020, without a good solution to our health insurance problems.

I could go on and on with this exposition about how difficult it will be to fix the problems with the awful hcr bill, but the bottom line is that working within the framework of this bill to improve it will be a tremendously complicated and wonky matter, involving obscure messaging to the public. Efforts at improvement will consume huge quantities of political effort and money, while only nibbling at a problem that will cost Americans hundreds of thousands of lives and millions of bankruptcies and foreclosures over the next decade.

Improving the present hcr legislation is therefore the wrong thing to do. In fact, it is the worst thing we can do. What we need instead is to start over with HR 676, Medicare for All, and hammer away at that until it's done. Bring it up in every session of Congress.

We'll fail at first, of course, but we ought to be able to get extensions of Medicare to progressively younger groups with each new effort. I think that if Richard Kirsch had taken HCAN's $51 million in this last round of political effort, and gotten that money behind Medicare for All, it's very likely we could have gotten Medicare extended to people 55 and over, and we may very well have been able to eliminate Medicaid and place all Medicaid recipients including those just made eligible under Medicare, with appropriate subsidies for low-income people. We might also have gotten buy-ins to Medicare for those 45 - 55.

And most importantly we would have had a framework we could have continuously improved with later legislative efforts just by adding a few more years to Medicare eligibility, congressional session by congressional session. By 2015, the deed would have been done. We would have had Medicare for All, and the health insurance companies would be off our backs. Now, the best we're looking at, unless we change political direction, is a very costly health insurance system with an inadequate PO by 2020.

A result like this would have been much better than what we have now. And the messaging surrounding the campaign would have been much better, since everyone knows what Medicare is and how it works. The whole tea-party mess we saw last summer would have been greatly tempered. No "death panel" stuff to contend with. Less credible charges of 'socialism" because everyone knows that, since we like it, Medicare isn't "socialist." There would this have been much more support for change from the public. And, most importantly, much better understanding of the final bill when it passed.

What I'm saying is that the PO "sparkle pony" strategy was a huge mistake, and that those who care about universal health care should not compound the error by following a strategy of improving the hcr bill over the next 10-15 years. Too many people will continue to die, go bankrupt and get foreclosed on if we do that, and too much of our real national resources will be consumed by the health insurance industry and the providers. Also, the cost will be very great in dividing the progressive movement.

I don't know many progressives who are happy with the results of the hcr bill. Many express support because they still want to be loyal to Obama. But many also, resent the movement away from Medicare for All, and also the political tactics employed by PO partisans, including HCAN, to get Medicare for All taken "off the table." Those of us who favored Medicare for All were steamrollered. We're not going to forgive and forget that. Not when the result of using the PO strategy has been a failure in our eyes; a give-away to the insurance industry, further constraints on reproductive choice, no controls on future price increases, and very little immediate improvement for people who can't get coverage.

Progressives are not going to be mobilized in support of future efforts to improve the current bill. The only thing we'll fight for is Medicare for All. We'll compromise that, alright. But only on incremental movements towards Medicare for All. No more Rube Goldberg contraptions like the PO, and no more legislation that compromises with the health insurance industry, or the pharmaceuticals. It's over, Richard. Face it! The PO is dead among progressives. It. Ain't. Coming. Back!

(Cross-posted at All Life Is Problem Solving and Fiscal Sustainability).

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letsgetitdone's picture
Submitted by letsgetitdone on

Why do you read it that way? Whatever it is, that Sparkle Pony ain't coming back.

vastleft's picture
Submitted by vastleft on

there are numerous references to "PO" as if it were something rather than everything/nothing, the "sparkle pony" trope notwithstanding.

It's like waiting for Godot or for George and Martha's son in the Albee play to return, or for the waiter to serve some frim fram sauce. To humor such a costly delusion can do no good.

Submitted by gmanedit on

with ever-shifting possible meanings.

For example, you write:

Further, if it's not working, people will then immediately say: "well let's not get rid of the exchange, but let's add a Public Option (PO) to see if that will fix it." Then there'll be a fight over the size of the PO, and some compromise will be worked out so that only a small part of the population, those most in need, are eligible. Because only a small part of the population is eligible, the PO won't have the advantages of scale, so its performance will be inferior and the prices it can offer will be within 10% of private insurance.

I have no idea what "public option" might mean here; the meaning shifts from one sentence to another, seeming to end up as a welfare subsidy. I understand "Medicare from age 55 up."

letsgetitdone's picture
Submitted by letsgetitdone on

from the process we've just gone through. It might be an independent Government-owned insurer for which no more 10 million people are eligible, and perhaps as few as 5 million. Its size will be too small to negotiate favorable pricing from the providers.

chicago dyke's picture
Submitted by chicago dyke on

listen to these good people, LGID. they are trying to help you. re: today's elected dems and a PO? it. is. not. going. to. happen.

and it didn't!

let go of your allegiance to the dems. they aren't on your side. or ours.

letsgetitdone's picture
Submitted by letsgetitdone on

exactly why they will allude to it, VL?

vastleft's picture
Submitted by vastleft on

People who should know better will keep referring to "public option" as if it referred to any fixed thing without end, and there isn't a goddamned thing I can do about it.

I'm well aware that this is case, but I'll keep shaking my tiny e-fist about it nonetheless.

letsgetitdone's picture
Submitted by letsgetitdone on

You've mistaken me. I don't have any allegiance to the Dems, the sense that I'm planning to vote for any of them.

Submitted by lambert on

As VL points out, it is, and never was, any such thing.

Public option is a meme or talking point successfully propagated by career "progressives" to serve as a funding vehicle. It works as a funding vehicle exactly because it will always FAIL. If it succeeded, they couldn't raise funds with it any more!

This series of talking points (not including the one above) got good traction in comments over at Yves's place -- clickthroughs from point 4, which means people read all the way to the end.

VL, may I suggest that shaking your tiny e-fist on the econoblogs, too?

First they ignore you, then they ridicule you, then they fight you, then you win. -- Mahatma Gandhi